Saturday, August 13, 2005

Move over, Donald Trump! With a score like that, you're on your way to reaching your entrepreneurial dreams. Whether you want to start a card company, a landscaping business, a consulting firm, or something completely different, you've got the business instincts to make it happen. Some people flail with ideas, others don't have the know-how, and many don't have the guts to try. But you've already shown you've got a real shot at making your dreams a reality.

I got two questions "wrong", although i think the answers to a couple could have fallen either way.

14. Which of the following key assumptions do you have to test when starting a company?

Number of sales calls a salesperson can make

Conversion rate of prospects to customers

Length of sales cycle

Amount of technical support needed per unit sold

All of the above

When you're starting a company, you need to test all these assumptions because together, they determine the cash flow of your business. Write them down, test them, and monitor them because you don't want surprise your investors or run out of money. They are like the fuel gauge in your car: Don't wait until the warning light comes on. Monitor these key metrics from the very start so you're never in a position of running out of gas.

I went for customer converstion rate as you can make a zillion sales calls a year, but if you can't convert any, what's the point? The answer was all of the above.15. The reason to put an "out clause" in a partnership agreement is:

To enable you to get out of a bad deal

To make your lawyers happy

To enable both parties to work comfortably with each other

Because all agreements have "out clauses"

None of the above.

In this case i went for allowing parties to work with each other. This time the answer was none of the above.